BEST PRACTICES: Space utilization

Warehouse and distribution center managers constantly face the challenge to efficiently utilize space – and therefore reduce costs – while selecting material handling solutions that are specific to their applications and needs

Susan Comfort, the Raymond Corporation

12/15/2010

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Warehouse and distribution center managers constantly face the challenge to efficiently utilize space – and therefore reduce costs – while selecting material handling solutions that are specific to their applications and needs. Considering the throughput of products at a facility can better help managers understand their warehousing needs, helping to uncover solutions that combine material handling products and storage solutions to enhance productivity and drive down costs.

Lift truck, rack choices impact storage density

Effective warehouse space design must accommodate increasing numbers of stock keeping units (SKUs) while increasing cube utilization. To achieve this task, there are many types of lift trucks in various configurations and racks to consider, as each provides a specific storage function. For example, rack options include selective, deep-reach, drive-in or push-back rack.

The type of lift truck also is critical to efficiently utilizing space. Sit-down counterbalanced trucks require a wide (10-foot) aisle to retrieve materials stored in rack. Reach trucks require a narrow (8-foot aisle), and turret trucks require a very narrow aisle (5½-feet wide). The trucks that work within narrower aisles allow for more pallet storage and less space devoted to the aisle. In addition to using the horizontal space more effectively, narrow aisle trucks can lift higher, better utilizing available vertical space.

Chart 1 shows the number of pallet levels accommodated and the square feet required for each pallet stored using different types of lift trucks.

As an example, when comparing four levels of pallet storage, the reach truck enables storage of more than 20% more pallets in the same space as the sit-down counterbalanced lift truck. The turret trucks increase storage by more than 30% compared with the counterbalanced truck. When the turret truck is used for nine levels of pallet storage, it increases storage density 70% more than the sit-down counterbalanced truck.

One size doesn’t fit all

Some warehouses employ multiple methods of storage, such as various types of racking or mezzanines. Combining different types of storage systems is important in maximizing warehouse space utilization. However, the storage mediums should be selected based on the movement of inventory.

The Pareto principle states that 80% of the activity in a warehouse comes from 20% of the items, and these items are the fast-movers within the warehouse. The next 15% of the activity comes from 30% of the items, which are the medium-movers. Finally, 5% of warehouse activity comes from 50% of the items, which are the slow-movers.

By separating the fast-, medium- and slow-moving products within a warehouse, throughput can be increased by optimizing access to the fastest-moving products. Easier access to the products that generate the most warehouse activity reduces time spent traveling within a warehouse, enabling more time to be spent handling products.

Fast-movers typically are stored in bulk storage and wide-aisle selective pallet rack. For companies using reach trucks, fast-moving products can be stored in narrow aisles. Medium-movers are often best stored in narrow aisles that are equipped with selective pallet rack, carton-flow rack or carousels. Slow-moving products generally are stored in very narrow aisles and utilize turret trucks, carousels and shelving.

Seek opportunities for storage

Consulting with a material handling expert can help companies identify additional ways to increase pallet storage capacity or enhance warehouse design efficiency. For example, there may be an area above cross aisles that can be converted to storage space. Or, it may be possible to add racking to the area above dock doors. By examining opportunities to expand vertically into available space, warehouse managers can utilize the existing area more efficiently within a facility.

Understanding the number of SKUs and the number of pallets of each SKU is essential to optimizing warehouse design for ideal space utilization. In addition, warehouse managers should evaluate the movement of each of the SKUs. This information will drive decisions regarding material handling and storage systems, including rack height and required aisle widths.

By properly configuring warehouse space and material handling products to meet material handling and storage needs, facility managers can take steps to meet their ultimate challenge to drive down overall warehousing costs and enhance productivity.

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